Bottom Line: Canopy is basically admitting outdoor cannabis has a place in the market. They can’t risk letting craft growers go to market with a $0.25/gram growing cost when they are stuck above $1.00. We think outdoor supply is viable for flower and extract quality cannabis and the number of producers applying for outdoor licences will only grow.
Current Production Costs per Gram
Bottom Line: This article about Peru demonstrates the power of medical cannabis to change public opinion on cannabis as a whole. Even if recreational cannabis legalization is slow to roll out across the globe, medical cannabis legalization looks to be picking up speed, especially in South America, opening up new markets to publicly traded cannabis companies.
Bottom Line: We have been surprised by how quickly Thailand is moving forward with loosening cannabis restrictions. It will still take years for the medical market to become a major source of cannabis demand, but Thailand is setting an example the rest of Asia could follow.
Bottom Line: The more medical benefits that are discovered for CBD, the larger the ultimate size of the market for CBD-based medicine. CBD’s true potential just keeps on growing compared to THC which is largely prized as a recreational consumer product.
Bottom Line: Israel may be a thought leader in cannabis cultivation and research, but unless domestic companies can raise enough money to compete on equal footing with North American competitors, Israeli companies are likely to become only marginal players in the global cannabis industry.
Bottom Line: As the number of employees and the amount of tax revenue generated by the cannabis market grows, the industry’s lobbying power will increase. This lobbying power will likely lead to even faster regulatory change than what we are seeing today.
Global pot stocks had their second week of positive performance in a row, up another 1.2%. With news breaking this weekend that trade talks will continue with China, we could be looking at a third straight week of positive results for cannabis stocks.
From the peak in March, cannabis stocks are down 20%, but still 27% above the lows in December 2018. U.S. stocks outperformed Canadian peers, rising 1.5%. Once stocks rebound, we expect U.S. stocks to outperform Canadian names the rest of the year with better regulatory catalysts and growth prospects. MSOs are up 13% year to date while Canadian growers are up 27%, but this trend should reverse as we move through the year.
The overall marijuana index outperformed the S&P and the TSX by 1.5% and 2.1% respectively.
Stocks will remain seasonally weak as we go into the fall, but U.S. stocks have the benefit of some big regulatory catalysts potentially on the horizon this year.
Longer term, with the Canadian market legalized, we expect retail and wholesale price compression from a legal oversupply by the second half of 2019. Falling cannabis prices will pressure producer stocks later in 2019 or early 2020. After a shakeout, the remaining stocks will be better positioned as long-term buying opportunities.
- Kushco Launches Distribution Facility for Midwest Operations
- Curaleaf Acquires New Dispensaries, Greenhouse In Arizona
- Supreme Launching First KKE Oil Product Through Wiz Khalifa Partnership
- Green Growth Appoints Former Victoria’s Secret Exec New CMO
- Maine Creates Clear Path Towards Recreational Marijuana Industry
- Illinois Legalizes Recreational Cannabis Use
- California Launches Clampdown on Unlicensed Dispensaries
- Canopy Growth Acquires Extraction Company Keylife Sciences
- Tilray Announces Bulk medical Cannabis Oil Import to UK
- Supreme Cannabis Launches European CBD Investment Company
- Canadian Governments Earn $107.1M By Taxing Cannabis During Q1